‘Rs1,000-crore farm aid is peanuts’

The Maharashtra government on Saturday announced a Rs1,000 crore relief package for farmers who lost crops because of untimely rains. The aid would come roughly to Rs20,000 a hectare, as the preliminary estimates are of losses over 5.4 lakh hectares. As chief minister Prithviraj Chavan and his deputy, Ajit Pawar, put it, the compensation has been increased three-fold over the average assistance of Rs350 crore that the government has been giving farmers every year since 2004.

However, the package is likely to bring little relief to farmers, as their losses this year stand anywhere around Rs10,000 crore.
Given this year’s phenomenal increase in production cost, particularly for the rain-dependent farms, the loss of harvest due to an extended 60-day post-monsoon period comes as a rude shock. Farming risks have increased manifold with cash crops, price volatility, and natural calamities.

Package distribution
The government has decided to bear the burden of interest on grape growers’ loans for the next two years. Top officials say that, when desegregated, this will include three components: this year’s losses; interests on commercial loans; and the loans taken under the National Horticulture Mission.

Together, it amounts to about Rs250 crore. As the interest waiver is for two years, the benefit to grape growers in Nashik and Pune will eat into almost half the package. The government has said that it will bear the entire interest burden (without upper limit or land size restriction) so that the grape growers, whose losses are unprecedented, rebuild their vineyards.

The losses borne by growers of other traditional agriculture crops — paddy, soybeans, pulses, cotton, and sugarcane — would be compensated from the remaining amount and within the ambit of the existing norms. This means compensation for up to two hectares, unless the government decides to treat 2010 as a special case. Reliable sources say that in any case, each of the beneficiaries will not get more than Rs5,000, or Rs1,000 per acre. The details will be available by December 14-15.

Raw deal
Agriculture experts and peasants say that for the kind of losses borne by growers of paddy, soybean, sugarcane and cotton this year, an amount of Rs1,000 per acre is peanuts. The other promise of restoration of power supply to agriculture pumps favours the irrigated farms and ignores the majority which consists of rain-dependent peasants.

Another policy flaw, which has persisted since 1997, is that the panchanamas, or spot verification, are intended to compensate individuals and not the entire village.

5.4 lakh hectares of agriculture land, where crop losses are more than 50%, would be eligible for compensation. This area is scattered over 33 districts. On the ground, the actual acre of farmland wrecked by untimely rains is no short of a million hectares.

 ‘Who will the Rs1,000-crore package provide relief to and in what way?’ is thus a million dollar question.